Given that federal prohibition of cannabis means there is no bankruptcy protection for licensed businesses in state-regulated markets, a receivership is often the best—and only—alternative to reorganize or restructure a distressed business. However, this process can be a challenge because most states do not have cannabis receivership laws or regulations guiding the process.
As more businesses begin to look at this option in legal cannabis markets across the country, new laws or statutes are needed. I wanted to share an insider’s view on the business and regulatory implications, because my years helping develop Nevada’s adult-use policies have been eye-opening. In my work spanning government affairs and cannabis policymaking, I’ve observed firsthand the many pitfalls that can befall business owners, creditors and other stakeholders. I can also say with confidence that Nevada offers a receivership model other states should follow.